Weekly Feed Market Commentary
Published 27 August 14
Nov-14 UK feed wheat futures trended towards the £120/t mark throughout the last week. Despite closing somewhat stronger at £122.25/t on Friday (22 Aug), futures prices declined at the beginning of this week again, settling at £120.60/t on Tuesday (26 Aug). The Nov-14 futures seem reluctant to pass below the £120/t level despite UK feed wheat being around £3-5/t off the export market.
In the latest EU Crop Monitoring Report, released on Monday (25 Aug), the EU Commission pointed to very strong maize yields across the EU. Grain maize yields are forecasted to be almost 12% up on last year and 11% over the previous five year average. Summer rainfall, which has brought much wheat quality concern, has offered support to the growing maize crop. The strong maize crop and expected higher levels of feed wheat availability are a double whammy for EU feed grain prices, despite the reintroduction of EU import tariffs.
Conditions in Ukraine were hotter and drier than usual during the end of the flowering period and the start of the grain-filling stages, according to the EU Commission; which is expected to negatively impact maize yields for last season’s third largest exporter. However, this is currently offset by increasing confidence over the US maize crop as conditions remain good moving towards harvest.
Nov-14 Paris maize futures settled at €151.00/t on Tuesday, a fall of €2.75/t on the previous week and a new contract low. Dec-14 Chicago maize futures closed at $143.70/t on Tuesday, a fall of $2.85/t on the previous week.
The oilseeds complex was influenced by mixed headlines last week, with very strong demand for US soyabeans and higher than expected crushings and export sales providing some short term support to prices against the backdrop of an ultimately bearish market.
While nearby Chicago soyabean prices increased by almost $20/t during last week, they have declined again this week, settling at $395.14/t on Tuesday (26August). This represents a fall of $33.25/t on Friday’s close and a decline of $16.44/t compared with the previous week as the short term support is offset by the bearishness of record production forecasts. New crop Nov-14 Chicago soyabean futures reached a new contract low on Tuesday, settling at $377.69/t.
DBV, the German farmers association, last week revised their forecasts for German rapeseed production to 5.8Mt in 2014/15, up from 5.7Mt in 2013. Quality has been reported as generally positive with good to very good oil content, despite heavy rains which delayed harvesting during the summer.
Nov-14 Paris rapeseed futures closed at €324.25/t on Tuesday (26 Aug), an increase of €4.75/t on the previous week. UK soyameal (Hi pro, Ex-store East Coast, August delivery) was £341.00/t on 22 August, up by £11.00/t on the previous week. UK rapemeal (34%, ex-mill Erith, August delivery) was £163.00/t on 22 August, also up on the previous week, by £3.00/t.
Figures and commentary provided in association with HGCA and BPEX.
For further information on the cereals market click here to link through to HGCA website.